Brexit Outline: What is the UK Government’s Plan for Brexit?

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Brexit Outline: What is the UK Government's Plan for Brexit?

A Quick Recap on Brexit

Back in June 2016, the result of a referendum was that 51.9% of voters chose to Leave the EU. David Cameron stepped down as Prime Minister of the UK, and Theresa May replaced him. She triggered Article 50 on 29th March 2017. This legislation means that the UK has two years to negotiate our withdrawal with the rest of the EU states. However, the deadline is fast approaching. The UK is due to leave the EU at 11pm on Friday 29th March 2019. Theresa May has finally drafted an agreement with the EU, as well as a political declaration outlining future relations. UK Parliament will be voting on the agreement on 11th December 2018. It will then go to a vote in the European Parliament if it passes. If not, the UK could face leaving the EU with no deal, which would result in chaos. Formal negotiations on any official Brexit deal will only get underway when Brexit officially happens in March. This is what is happening and what could happen to affect the path of Brexit between now and then:

The UK is Leaving the European Union

The European Union is a partnership between 28 European countries for economic and political purposes. The EU began after World War II with the aim of encouraging co-operation through trading, which would also discourage war between the countries. It is now a “single market” which allows the free movement of people and goods as if every state was part of one country. There is such a long history and so much legislation to consider that it has taken a year and a half of talks for Theresa May to create a draft agreement for the terms of Brexit. Following a summit on 25th November 2018, the other 27 EU states have accepted the drafts of a withdrawal agreement and also a political declaration. The withdrawal agreement is a 585-page legal document setting out the terms for the UK leaving the EU. The political declaration is not legally binding, but it sets out the UK’s general intentions for our future relationship with the EU.

What Will Happen When the UK Leaves?

Right now, Britain leaving the EU is as much of a certainty as is possible, considering the amount of uncertainty surrounding the specific terms of the departure. The primary question is not whether we leave the EU, but what will happen to us when we do. The secondary question which also affects this is when we leave the EU. Brexit will officially begin on 29th March 2019, but May and the EU states have agreed upon a 21-month transition period after that. This will allow a smoother implementation of the Brexit deal to avoid sudden disruptions for business and travel. If there is no deal, there will be no transition period. A deal is necessary to determine what will happen when we leave and on which timescales. It is likely to be a slow process, because there is no precedent for anything like this, and there are so many affairs to settle. This is why it has taken so long to create a draft agreement since the triggering of Article 50. At this point, no changes are concrete, so it is impossible to predict definite impacts on the UK. Healthcare, travel, and working rights will be more restrictive, but UK citizens will not lose fundamental human rights as a result of Brexit. There have been forecasts of the economy crashing and another recession, but it is difficult to truly predict what the financial repercussions will be without knowing the fixed terms of a solid deal.

What Will Happen to the UK if There is No Brexit Deal?

The major cause for concern surrounding Brexit is the risk of there not being a deal. If no agreement is made before 29th March 2019, then the UK will be leaving the EU with no new regulations to replace the ones we are withdrawing from. There would be no transition period and no clarity about what was happening next. Consumers, businesses, and public bodies in the UK and the EU states interacting with them would have to adjust their practices at once when EU rules immediately ceased to apply. This would be bad for trade, resorting to external rules which could see the price of goods increase and delays as a result of the higher tariffs and customs barriers. The rights of UK citizens and immigrants, including workers and expatriates, would be up in the air. This includes EU citizens living and working in the UK too. Without an agreement on transport and security, flights could stop and there could be long border queues. The problem of the Irish border would remain, with no solution to avoid a hard border. Lack of trade agreements could cause massive problems for multiple industries, including fishing and agriculture as well as energy. There are concerns about resources post-Brexit, as no deal would have a negative impact on significant imports such as food and medicines. No deal could result in a “hard Brexit” where the UK severs ties with the EU and has no control over free movement or trade decisions. The UK government is making preparations for a variety of scenarios, including no deal, but they are hoping to avoid this outcome.

What is the UK Government's Plan for Brexit?

What Does Theresa May’s Withdrawal Agreement for Brexit Say?

The other 27 member states in the EU have all greenlit the withdrawal agreement which Theresa May presented at the Brexit summit. If the UK Parliament also greenlights the agreement, then we will move forward with Brexit according to the exact terms outlined in this deal. These are the important points of the agreement and what they mean for the UK:

Brexit Transition Timing

The UK government is suggesting an “implementation period” for when Brexit begins on 29th March 2019. The UK will lose our membership of the EU but will still have to abide by all their rules until 31st December 2020. The UK will not be present in the European Parliament and will have no say in EU regulations. Yet we must still follow EU rules until the end of this period. They can agree to extend this to 2022 at the latest, as long as they make the decision before 1st July 2020. This is hardly taking back control for the UK. However, it will buy more time for negotiating critical security issues and our future relationship with the EU. It will also give businesses and public bodies time to prepare for the new rules.

Citizen’s Rights and Freedom of Movement

Brexit has been causing a lot of anxiety for British citizens living in EU countries and also citizens from EU countries living in the UK. The UK government wants to reassure citizens that they are not going to lose their residency or their social security rights after Brexit. This applies to residencies beginning during the transition period, too. Anybody can apply for permanent residence after living in the same EU country for 5 years. However, there is less reassurance for those hoping to study and work within the EU. It is unclear what is going to happen concerning the recognition of qualifications, access to education, and working across borders. Freedom of movement will stop both ways when the UK takes control of its borders. Both sides want to avoid visas for short-term trips (business or holidays), but they might introduce visas for longer visits.

Brexit and The Irish Border

One of the most controversial aspects of Brexit is what will happen to the Irish border. As part of the UK, Northern Ireland will be leaving the EU, while the Republic of Ireland remains an EU member. Everybody wants to avoid a “hard border” between them, which would strain the peace. The document proposes that if we do not reach a trade agreement by the end of the transition period, this will trigger a backstop. This will be the creation of a single customs territory between the UK and the EU. The customs rules of the EU single market will apply much more closely to Northern Ireland, who will have more of a complicated relationship with EU customs than the rest of the UK.  This would be a temporary way to avoid friction for trading until they could reach a better agreement. It would also stop the UK from implementing their own trade deals with other countries and could create new border checks. This upset many Brexit supporters and caused some resignations within the government. The UK would not be able to leave this backstop unless the EU agreed.

Disputes and EU Laws After Brexit

During the transition period, the UK will still be under the jurisdiction of the European Court of Justice. They will set up a joint committee with the UK to resolve disputes on the withdrawal agreement. The ECJ won’t be able to resolve issues between the EU and the UK if the backstop is triggered. An arbitration panel will resolve it, but they can refer it to the ECJ for a decision if the dispute is based on EU law. Other than this, the UK will have some independence from the rulings of the ECJ with the arbitration system. After Brexit is finalized, the ECJ will have no direct jurisdiction over the UK. However, they will retain an indirect influence.

Brexit Fishing and Trade

Another contentious Brexit issue is fishing trade. Several EU countries object to the UK having access to EU produce markets without allowing EU fishing boats to access UK waters. The UK fishing sector is very vocal about wanting more control of UK waters and distribution of quotas. The problem is that the fishing industry is so interdependent between the UK and the EU that it will be very difficult to unravel it. If the UK denies EU countries access to their waters and fish, other EU countries could do the same. The UK exports its most popular fish, which are more commonly consumed in Nordic countries, while the most popular fish consumed in the UK are actually imported, so EU countries could retaliate with high import taxes and strict export checks. The delicacy of this issue is the reason that it is not part of the single customs territory backstop. They will have to negotiate a separate agreement for EU access to UK fishing.

Finance and the Brexit “Divorce Bill”

The UK will need to pay a financial settlement to the EU in order to leave. This “divorce bill” will settle the UK’s financial obligations to the EU. The agreement does not calculate an actual figure, but the current estimate is at least £39 billion. If there is an extension to the transition period, the UK will have to add further payments to this. We will pay it off over a number of years. If the UK refuses to pay for any reason, this would negatively affect our relationship with the EU and could even be taken to court. The UK would like to negotiate better terms for financial services between the UK and the EU as a third-party country, and also negotiate on the digital economy and access to data. The agreement and political declaration are both ambitious and cover a range of topics, but do not adequately cover suggestions for handling security and foreign policy, energy, or transport. It will take a long time to smooth it all out.

What Will Happen if UK Parliament Rejects the Brexit Deal?

On 14th November, the UK cabinet agreed to the text of the withdrawal agreement. There were several resignations and a (so far) unsuccessful attempt to trigger a no-confidence vote against Theresa May. This could then trigger another general election, which the Labour party is hoping for. If they won the majority, Labour would have to create their own withdrawal agreement before the Brexit deadline. There could be a possibility of another EU referendum, but this is not likely. We are too far down the road of Brexit to turn back, even if Remain won a second referendum. Even the Labour party is focusing on trying to get the best Brexit deal instead of trying to stop it at this point. The Brexit deal is crucial because it will determine the economic future of the UK. If there is no acceptable deal before 29th March 2019, we risk crashing out of the EU and becoming far worse off. This is why the Parliamentary vote on the withdrawal agreement taking place on Tuesday 11th December is so important. It doesn’t seem likely that it will pass, since so many MPs have publicly spoken against it. Theresa May is pushing the deal as a better alternative than no deal at all, even trying to organize a TV debate with the BBC for Sunday 9th December. If the deal does get voted down, Theresa May will have 3 weeks to attempt another Parliamentary vote. Otherwise, we could see the Conservative party replace her with another leader or have to vote in another general election. In the case of another election or another referendum, then the date of Brexit might have to be pushed back to allow time for renegotiations, but the EU would have to agree to it. The future of the UK and Brexit is very murky at the moment.